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Hi,
I have I think an uncommon situation. I was born in the states but my parents moved overseas when I was quite young. I am now moving back to the states (Florida). I have an "established" credit history overseas but of course that doesn't count for anything in the US. Thus I am looking at trying to build my credit score up. I am a fortunate to have a professional career and have good accumulated savings.
In June 2018 I opened a State Department Federal CreditUnion account and got a secured visa card with them. I initially put in USD$5000 as my security on the card. (In other countries I had purposely limited my credit on the card just in case the card fell into the wrong hands, etc.) After reading on this topic, this strategy would seem to be the opposite of the correct thing to do here in the states.
My goals are to be able to get the Chase Sapphire Reserve card and probably the Ink business card. I travel frequently and typically spend in the order of USD$25k through credit cards on travel, hotels, dining, and online shopping (amazon, etc)
What is the fastest way to build my credit here in order to be able to get various credit card offers, and get a few of the cards with perks (eg some of the hotel cards will give one free night a year, etc. Some of the travel cards come with access to air line lounges etc.)
So currently I have scores Equifax 721, Transunion 721, but no experian score since my credit history is too short.
Q1: Would it be advisable to just deposit more money in my Credit Union and just up the credit limit on my card manually? Eg deposit more money and bring my credit limit (secured) to USD$10k, or USD$15k, or USD$25k, etc. What is the diminishing returns on the credit score?
Q2: Since my file will be thin (as I understand it) should I be opening more checking accounts in the meantime to ensure I have a thicker account? If so are there any in particular, eg if I want a chase card should I open a chase savings account and sock USD$10k in there? etc.
Q3: Credit Karma is telling me that I have good odds for being approved for the American Express platinum card, yet I still have not posted an Experian score since my credit history is too young. Are they simply mistaken or are they likely to be telling the truth and I don't need to wait the 6 months until the experian score posts?
Thanks in advance,
j
@Thaitea007 wrote:
Q1: Would it be advisable to just deposit more money in my Credit Union and just up the credit limit on my card manually? Eg deposit more money and bring my credit limit (secured) to USD$10k, or USD$15k, or USD$25k, etc. What is the diminishing returns on the credit score?
To this question I would not add anymore money to this secure card as this card does not graduate to unsecured. So if your goal is to get better cards aka CSR then I wouldn’t park anymore money then needed on a secure card you will eventually just close down the road, once you get approved for premium cards.
Thanks. I was planning on actually dropping the secure limit down as I got new cards in order to maintain the total overall credit limit the same, and higher in order to ensure that some of the CC compines would find me more "attractive". Wouldn't having a higher overall credit limit (even if it is "self given" through a secured card) increase my credit score? Or does secured credit line credit "top out"? Thanks,
j
@Thaitea007 wrote:
Q2: Since my file will be thin (as I understand it) should I be opening more checking accounts in the meantime to ensure I have a thicker account? If so are there any in particular, eg if I want a chase card should I open a chase savings account and sock USD$10k in there? etc.
File thickness refers to your credit report file, not checking accounts or other accounts not on your credit report.
To do this you must have many paid on time accounts like credit cards, installment loan and mortgage loans. This is only built over time and you can start by opening different accounts that are best suited for yourself.
Ahh! Thanks. So eg having a savings account with chase with say $15k parked in it will make no difference to credit applications with chase then?
If I were in your shoes, The first thing I would do is check to see if I have pre-qualified with American Express and Discover. These two lenders are known to be receptive to "thin" files.
American Express Pre-Qualified Check
Discover Card Pre-Approval Check
Are you close to a Chase Bank location? If you are I can outline a strategy you can use to eventually get a Sapphire card.
@Anonymous wrote:If I were in your shoes, The first thing I would do is check to see if I have pre-qualified with American Express and Discover. These two lenders are known to be receptive to "thin" files.
American Express Pre-Qualified Check
Discover Card Pre-Approval Check
Thanks. I just cheked AmericanExpress and it said: "J, we could not find Pre-Qualified Offers for you at this time." and then it listed some general cards: Cash Magnet Card, Amex Everyday Card, Premier Rewards Gold Card (but I think this was just a generic)
I tried Discover and it said: Thank you for your interest in Discover®. Unfortunately, at this time we are not able to provide you an offer due to the following:
CREDIT FILE FROZEN
Please contact the credit bureau to request a temporary lift of the freeze on your credit report. Once the credit bureau has lifted the freeze, please return to Discover.com and re-submit your request in eight days.
And indeed, this was one of the first things I did with the whole moving back to the US thing and opening my first us account. I put a lock on the credit reports for EQ, EX, and TU, to protect againt identiy theft, etc. Sooo... I take it the credit card companies need my account with the CRA's to be unlocked to even see my info let alone issue anything against it? Thus I am leaning towards unlocking my EQ, EX, and TU and then trying again in 8 days... Thanks for the advice